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Business

Storm cuts U.S. oil, gas, power output, sending prices higher

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Dec 23 (Reuters) – Frigid cold and blowing winds on Friday knocked out power and cut energy production across the United States, driving up heating and electricity prices as people prepared for holiday celebrations.

Winter Storm Elliott brought sub-freezing temperatures and extreme weather alerts to about two-thirds of the United States, with cold and snow in some areas to linger through the Christmas holiday.

More than 1.5 million homes and businesses lost power, oil refineries in Texas cut gasoline and diesel production on equipment failures, and heating and power prices surged on the losses. Oil and gas output from North Dakota to Texas suffered freeze-ins, cutting supplies.

Some 1.5 million barrels of daily refining capacity along the U.S. Gulf Coast was shut due to the bitterly cold temperatures. The production losses are not expected to last, but they have lifted fuel prices.

Knocked out were TotalEnergies (TTEF.PA), Motiva Enterprises (MOTIV.UL) and Marathon Petroleum (MPC.N) facilities outside Houston. Cold weather also disrupted Exxon Mobil (XOM.N), LyondellBasell (LYB.N) and Valero Energy (VLO.N) plants in Texas that produce gasoline, diesel and jet fuel.

Sempra Infrastructure’s Cameron LNG plant in Louisiana said weather disrupted its production of liquefied natural gas without providing details. Crews at the 12 million tonne-per-year facility were trying to restore output, it said.

Freeze-ins – in which ice crystals halt oil and gas production – this week trimmed production in North Dakota’s oilfields by 300,000 to 350,000 barrels per day, or a third of normal. In Texas’s Permian oilfield, the freeze led to more gas being withdrawn than was injected, said El Paso Natural Gas operator Kinder Morgan Inc. (KMI.N).

U.S. benchmark oil prices on Friday jumped 2.4% to $79.56, and next-day gas in west Texas jumped 22% to around $9 per million British thermal units , the highest since the state’s 2021 deep freeze.

Power prices on Texas’s grid also spiked to $3,700 per megawatt hour, prompting generators to add more power to the grid before prices fell back as thermal and solar supplies came online.

New England’s bulk power supplier said it expected to have enough to supply demand, but elsewhere strong winds led to outages largely in the Southeast and Midwest; North Carolina counted more than 187,000 without power.

“Crews are restoring power but high winds are making repairs challenging at most of the 4,600 outage locations,” Duke Energy spokesman Jeff Brooks wrote on Twitter.

Heating oil and natural gas futures rose sharply in response to the cold. U.S. heating oil futures gained 4.3% while natural gas futures rose 2.5%.

In New England, gas for Friday at the Algonquin hub soared 361% to a near 11-month high of $30 mmBtu.

About half of the power generated in New England comes from gas-fired plants, but on the coldest days, power generators shift to burn more oil. According to grid operator New England ISO, power companies’ generation mix was at 17% from oil-fired plants as of midday Friday.

Gas output dropped about 6.5 billion cubic feet per day (bcfd) over the past four days to a preliminary nine-month low of 92.4 bcfd on Friday as wells froze in Texas, Oklahoma, North Dakota, Pennsylvania and elsewhere.

That is the biggest drop in output since the February 2021 freeze knocked out power for millions in Texas.

One billion cubic feet is enough gas to supply about 5 million U.S. homes for a day.

Reporting by Erwin Seba and Scott DiSavino; additional reporting by Arathy Somasekhar and Laila Kearney; editing by Jonathan Oatis, Kirsten Donovan, Aurora Ellis and Leslie Adler

Our Standards: The Thomson Reuters Trust Principles.

Scott Disavino

Thomson Reuters

Covers the North American power and natural gas markets.

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Business

Ex-Theranos president Balwani sentenced to nearly 13 years for fraud

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Dec 7 (Reuters) – A U.S. judge on Wednesday sentenced former Theranos Inc President Ramesh “Sunny” Balwani to 12 years and 11 months in prison on charges of defrauding investors and patients of the blood testing startup led by Elizabeth Holmes, a spokesperson for the U.S. attorney’s office confirmed.

U.S. District Judge Edward Davila in San Jose, California, imposed the sentence on Balwani, who was convicted by a jury on two counts of conspiracy and 10 counts of fraud in July.

Prosecutors said Balwani, 57, conspired with Holmes, 38, to deceive Silicon Valley investors into believing the company had achieved miniaturized machines that could accurately run a broad array of medical diagnostic tests from a small amount of blood.

Meanwhile, the company secretly relied on traditional methods to run tests and provided patients with inaccurate results, prosecutors said.

Holmes, who started the company as a college student and became its public face, was indicted alongside Balwani, her former romantic partner, in 2018.

Davila later granted each a separate trial after Holmes said she would take the stand and testify that Balwani was abusive in their relationship. He has denied the allegations.

Holmes was convicted in January on four counts of fraud and conspiracy but acquitted of defrauding patients.

[1/3] Ramesh “Sunny” Balwani, former president and chief operating officer (COO) of Theranos and ex-boyfriend of founder Elizabeth Holmes, leaves after the opening day of his federal trial for wire fraud and conspiracy to commit wire fraud was postponed due to coronavirus disease (COVID-19) exposure in the courtroom in San Jose, California, U.S. March 16, 2022. REUTERS/Brittany Hosea-Small/File Photo

Davila sentenced Holmes to 11-1/4 years in prison at a hearing last month, calling Theranos a venture “dashed by untruths, misrepresentations, plain hubris and lies.”

Prosecutors subsequently argued Balwani should receive 15 years in prison, saying he knew Theranos’ tests were inaccurate from overseeing the company’s laboratory operations, and decided to “prioritize Theranos’ financial health over patients’ real health.”

The probation office had recommended a nine-year sentence.

Balwani’s attorneys asked for a sentence of probation, arguing that he sought to make the world a better place through Theranos and was not motivated by fame or greed.

Once valued at $9 billion, Theranos promised to revolutionize how patients receive diagnoses by replacing traditional labs with small machines envisioned for use in homes, drugstores and even on the battlefield.

The company collapsed after a series of Wall Street Journal articles in 2015 questioned its technology.

The case is U.S. v. Balwani, U.S. District Court, Northern District of California, No. 18-cr-00258.

Reporting by Jody Godoy in New York;
Editing by Noeleen Walder and Bill Berkrot

Our Standards: The Thomson Reuters Trust Principles.

Jody Godoy

Thomson Reuters

Jody Godoy reports on banking and securities law. Reach her at jody.godoy@thomsonreuters.com

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US

Lafarge pleads guilty to supporting Islamic State, will pay U.S. $778 million

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NEW YORK, Oct 18 (Reuters) – French cement maker Lafarge pleaded guilty on Tuesday to a U.S. charge that it made payments to groups designated as terrorists by the United States, including Islamic State.

The admission in Brooklyn federal court marked the first time a company has pleaded guilty in the United States to charges of providing material support to a terrorist organization. Lafarge, which became part of Swiss-listed Holcim (HOLN.S) in 2015, agreed to pay $778 million in forfeiture and fines as part of the plea agreement.

U.S. prosecutors said that Lafarge paid Islamic State and al Nusra Front, through intermediaries, the equivalent of approximately $5.92 million.

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Lafarge is also facing charges of complicity in crimes against humanity in Paris for keeping a factory running in Syria after a conflict broke out in 2011.

Lafarge eventually evacuated the cement plant in September 2014, U.S. prosecutors said. At that point, Islamic State took possession of the remaining cement and sold it for the equivalent of $3.21 million, prosecutors said.

U.S. Deputy Attorney General Lisa Monaco said on Tuesday during a news conference that the company’s actions “reflect corporate crime that has reached a new low and a very dark place.”

“Business with terrorists cannot be business as usual,” Monaco added.

The cement maker previously admitted after an internal investigation that its Syrian subsidiary paid armed groups to help protect staff at the plant. But it had denied charges that it was complicit in crimes against humanity.

Lafarge Chair Magali Anderson said in court on Tuesday that from August 2013 until November 2014 former executives of the company “knowingly and willfully agreed to participate in a conspiracy to make and authorize payments intended for the benefit of various armed groups in Syria.”

“The individuals responsible for this conduct have been separated from the company since at least 2017,” she said.

Monaco said that French authorities have arrested some of the executives involved but did not provide names. Court records refer to six unnamed Lafarge executives.

In a statement, Holcim noted that none of the conduct involved Holcim, “which has never operated in Syria, or any Lafarge operations or employees in the United States, and it is in stark contrast with everything that Holcim stands for.”

Holcim said that former Lafarge executives involved in the conduct concealed it from Holcim, as well as from external auditors.

The SIX Swiss Exchange suspended trading in Holcim shares before the news.

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Reporting by Luc Cohen in New York and Karen Freifeld;
Editing by Noeleen Walder and Lisa Shumaker

Our Standards: The Thomson Reuters Trust Principles.

Luc Cohen

Thomson Reuters

Reports on the New York federal courts. Previously worked as a correspondent in Venezuela and Argentina.

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Business

Spirit ends sale to Frontier as JetBlue talks continue

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July 27 (Reuters) – Spirit Airlines Inc (SAVE.N) canceled its $2.7 billion sale to Frontier Group Holdings Inc (ULCC.O) on Wednesday after Spirit shareholders balked at supporting it, leaving JetBlue Airways Corp (JBLU.O) with an opening to clinch a deal.

The development, first reported by Reuters on Wednesday, came after Spirit pushed back a shareholder vote on the Frontier deal four times, hoping it could muster enough support. Spirit had earlier argued that antitrust regulators were unlikely to clear JetBlue’s $3.7 billion bid.

The outcome was a setback for Frontier and its chairman Bill Franke, who was instrumental in kicking off talks between the sides last year. Franke’s airline-focused buyout firm, Indigo Partners, is a major shareholder in Frontier.

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“While we are disappointed that Spirit Airlines shareholders failed to recognize the value and consumer potential inherent in our proposed combination, the Frontier board took a disciplined approach,” Franke said in a statement.

A Frontier-Spirit combination would have reshaped the domestic travel landscape and marked the most consequential U.S. airline industry merger since Alaska Air Group bought Virgin America Inc for $2.6 billion in 2016.

JetBlue sees Spirit as an opportunity to expand its domestic footprint at a time when the U.S. airline industry is dogged by labor and aircraft shortages.

A sale of Spirit to Frontier or JetBlue would create the fifth-largest U.S. airline. Negotiations between JetBlue and Spirit are progressing favorably and a deal is possible in the next few weeks, according to people familiar with the matter.

“We are pleased that the merger agreement with Frontier has been terminated and we are engaged in ongoing discussions with Spirit toward a consensual agreement as soon as possible,” JetBlue said in a statement.

But Spirit also could choose to remain independent.

ANTITRUST RISK

Spirit has expressed concern about JetBlue’s Northeast Alliance (NEA) partnership with American Airlines (AAL.O). The U.S. Justice Department filed an antitrust lawsuit against American and JetBlue in September seeking to end the alliance, saying it would lead to higher fares in busy airports in the U.S. Northeast.

JetBlue so far has refused to pull out of the alliance and instead offered other sweeteners like a higher breakup fee and route divestments.

Frontier shares rose 6.4% to close at $11.27 as investors expressed relief that the company exited what had become a bidding war for Spirit. Spirit shares rose 4% to $24.30, while JetBlue shares rose 3.6% to $8.35.

With the end of the proposed Spirit-Frontier tie-up, Spirit will pay Frontier $25 million for merger-related costs that it incurred. As per the terms of the deal, Spirit would owe Frontier an additional $69 million if it ends up striking a merger deal with JetBlue or any other competitor within the next 12 months.

“Now that Spirit Airlines has terminated the Frontier merger agreement, we hope that Frontier management will put aside its merger distraction and invest the same amount of resources and focus to improving conditions at their own airline,” said the Frontier pilots’ union, which is a subset of the Air Line Pilots Association (ALPA).

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Reporting by Anirban Sen and Greg Roumeliotis in New York, additional reporting by David Shepardson
Editing by Chizu Nomiyama, Will Dunham, Matthew Lewis and David Gregorio

Our Standards: The Thomson Reuters Trust Principles.

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Business

Norwegian oil and gas workers start strike, cutting output

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OSLO, July 5 (Reuters) – Norwegian offshore workers began a strike on Tuesday that will reduce oil and gas output, the union leading the industrial action told Reuters.

The strike, in which workers are demanding wage hikes to compensate for rising inflation, comes amid high oil and gas prices, with supplies of natural gas to Europe especially tight after Russian export cutbacks.

“The strike has begun,” Audun Ingvartsen, the leader of the Lederne trade union said in an interview.

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Operator Equinor (EQNR.OL)has initiated a shutdown of three fields in the North Sea as a result of a strike, the company said on Tuesday. read more

The Norwegian Labour Ministry reiterated that it was following the conflict “closely”. It can intervene to stop a strike if there are exceptional circumstances.

On Tuesday, oil and gas output will be reduced by 89,000 barrels of oil equivalent per day (boepd), of which gas output makes up 27,500 boepd, Equinor reiterated on Tuesday.

On Wednesday, the strike will deepen the cut to the country’s gas output to a total of 292,000 barrels of oil equivalent per day, or 13% of output, NOG said on Sunday, in line with Equinor’s estimate. read more

Oil output from Wednesday will be cut by 130,000 barrels per day, Equinor said, in line with the lobby’s earlier estimate.

That corresponds to around 6.5% of Norway’s production, according to a Reuters calculation.

A further planned escalation by Saturday could see close to a quarter of Norway’s gas output shut, as well as around 15% of its oil production, according to a Reuters calculation.

“Consequences of this escalation are not yet clear,” Equinor said.

It is ultimately the operator’s – Equinor’s – decision to shut output.

THREE-STEP ESCALATION

Industrial action began at midnight local time (2200 GMT) at three fields – Gudrun, Oseberg South and Oseberg East – and will expand to three other fields – Kristin, Heidrun and Aasta Hansteen – from midnight on Wednesday.

A seventh field, Tyrihans, will also have to shut on Wednesday because its output is processed from Kristin.

By July 9, Sleipner, Gullfaks A and Gullfaks C would likely stop producing as Lederne members are considered crucial to operations, with potential ripple effects on other fields which pump their product via those fields.

If they did, it could reduce the output of crude and other oil liquids by another 160,000 boepd and natural gas output by close to 230,000 boepd, according to a Reuters calculation.

Members of the Lederne trade union on Thursday voted down a proposed wage agreement that had been negotiated by companies and union leaders. read more

Norway’s other oil and gas labour unions have accepted the wage deal and will not go on strike.

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Additional reporting by Victoria Klesty, editing by Kim Coghill and Jason Neely

Our Standards: The Thomson Reuters Trust Principles.

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World

Cementing ties, UAE buys 80 French-made Rafale warplanes

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French President Emmanuel Macron, wearing a protective face mask, waits for a guest at the Elysee Palace in Paris, France, December 1, 2021. REUTERS/Sarah Meyssonnier

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DUBAI, Dec 3 (Reuters) – The United Arab Emirates ordered 80 Rafale fighter jets on Friday, the largest order ever for the warplane, a multi-billion dollar arms contract that deepens economic and political ties with France.

French President Emmanuel Macron began a two-day trip to the Gulf on Friday, and will also visit Qatar and Saudi Arabia. His visit comes at a time when Gulf Arab states have voiced uncertainty about the United States’ focus on the region even as they seek more weapons from their key security ally.

The French leader has forged a good relationship with Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed al-Nahyan (MBZ) with investments flowing between both countries. Paris has a permanent military base in the Emirati capital.

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“In addition to the presence of three French military bases on UAE territory, this mutual trust translates into the acquisition of 80 Rafale planes, 12 Caracal helicopters, and associated elements,” the French presidency said in a statement after a signing ceremony between MBZ and Macron on the sidelines of the Dubai Expo 2020.

Dassault shares rose 6% on the announcement.

The deal, which could be worth at least $15 billion, is the biggest bulk purchase of the Dassault-made Rafale, other than by the French army, and comes after deals in Greece, Egypt and Croatia this year.

The on-off negotiations for the Rafale fighter jets have been going on for more than a decade with Abu Dhabi publicly rebuffing France’s offer to supply 60 Rafale jets in 2011 as “uncompetitive and unworkable.” Abu Dhabi already has Mirage warplanes.

Defence sources said the Rafale would replace the Mirage 2000 fleet and is unlikely to displace the American F-35 as the UAE continues to hedge its security with two major suppliers, France and the United States.

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Additional reporting by Tim Hepher; Editing by Tim Hepher, Karishma Singh and David Evans

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Business

Israel PM warns Unilever of “severe consequences” from Ben & Jerry’s decision

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JERUSALEM, July 20 (Reuters) – Israel warned consumer goods giant Unilever Plc (ULVR.L) on Tuesday of “severe consequences” from a decision by subsidiary Ben & Jerry’s to stop selling ice cream in Israeli-occupied territories, and urged U.S. states to invoke anti-boycott laws.

The Ben & Jerry’s announcement on Monday followed pro-Palestinian pressure on the South Burlington, Vermont-based company over its business in Israel and Jewish settlements in the West Bank, handled through a licensee partner since 1987.

Ben & Jerry’s said it would not renew the license when it expires at the end of next year. It said it would stay in Israel under a different arrangement, without sales in the West Bank, among areas where Palestinians seek statehood. read more

Most world powers deem Israel’s settlements illegal. It disputes this, citing historical and security links to the land, and has moved to penalise anti-settlement measures under Israeli law while securing similar legal protection in some U.S. states.

Israeli Prime Minister Naftali Bennett’s office said he spoke with Unilever CEO Alan Jope about the “glaring anti-Israel measure” by the ice cream maker.

“From Israel’s standpoint, this action has severe consequences, legal and otherwise, and it will move aggressively against any boycott measure targeting civilians,” Bennett told Jope, according to the statement from his office.

Britain’s Unilever did not immediately respond to a Reuters request for comment.

Gilad Erdan, Israel’s ambassador to Washington, said he had raised the Ben & Jerry’s decision in a letter sent to 35 U.S. governors whose states legislated against boycotting Israel.

“Rapid and determined action must be taken to counter such discriminatory and antisemitic actions,” read the letter, tweeted by the envoy, which likened the case to Airbnb’s 2018 announcement that it would delist settlement rental properties.

Airbnb reversed that decision in 2019 following legal challenges in the United States, but said it would donate profits from bookings in the settlements to humanitarian causes.

Palestinians welcomed the Ben & Jerry’s announcement. They want the West Bank, East Jerusalem and the Gaza Strip for a future state. Israel deems all of Jerusalem its capital – a status not recognised internationally.

Writing by Dan Williams
Editing by Jeffrey Heller and Raissa Kasolowsky

Our Standards: The Thomson Reuters Trust Principles.

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